Energy supply

Projections

• Technology improvements help achieve more efficient fuel use and lower emissions intensity across all sources of supply
• Oil remains the largest source; essential for commercial transportation and chemicals
• Natural gas demand rises the most, largely to help meet increasing needs for electricity and lower-carbon industrial heat
• Lower carbon energy sources - including wind/solar, biofuels and nuclear - increase at the fastest pace 
• Coal is still prominent in some non-OECD countries, however global consumption likely peaked in 2013, as the OECD and China shift to lower-carbon energy sources

• The energy mix to meet rising demand - while also addressing environmental impacts, including the risks of climate change - will vary by sector
• Oil remains essential for transportation, where growing commercial transportation still relies on liquid fuels to meet more than 90 percent of demand
• With a drive for cleaner and more efficient operations, the industrial sector relies primarily on electricity and natural gas for growth; industrial oil demand grows as a feedstock for chemicals, asphalt, lubricants and other specialty products
• Electricity demand rises in all end-use sectors while the mix of fuel supply for electricity generation is shifting to lower-carbon sources

Liquids

Projections 

Liquids are projected to remain the world’s leading energy source in 2040, even as demand growth slows beyond 2030.

Commercial transportation and chemicals - sectors where liquid fuels are favored for their high energy density and distinctive chemical properties - drive liquids demand growth. Overall, demand for liquids is expected to rise about 16 million barrels per day by 2040 with almost all of the growth in the emerging markets of Asia, Africa, the Middle East and Latin America.

New investments in oil production - and in technologies to improve recoverability, enhance efficiency and reduce cost - are needed to offset natural production decline and meet rising demand. Much of the growth in liquids production is expected to be from sources of supply that have been unlocked by technology advances in the past two decades: North American tight oil and the natural gas liquids associated with unconventional oil and gas production, deepwater projects offshore Brazil and Guyana, and Canadian oil sands, for example.

Continued investment in conventional crude and condensate is required too as the Middle East and Russia/Caspian remain significant oil producing regions helping meet the needs of consumers worldwide.

• Global liquids demand growth is concentrated in developing nations, with Asia Pacific accounting for about 65 percent of global growth by 2040
• Efficiency gains and fuel switching in Europe reduce liquids demand by about 20 percent from 2017 to 2040, led by a reduction of about 55 percent in light-duty vehicle liquids demand
• Chemicals and commercial transportation sectors make up nearly all of the liquids demand growth, with these sectors growing about 60 percent and 40 percent, respectively to 2040

• The supply of existing oil production naturally declines at an estimated 7 percent per year without further investment. Significant investment is needed to offset this natural decline and meet the projected demand growth
• In 2017, conventional crude and condensate made up about two-thirds of the liquid supply. By 2040, new investment is expected to have diversified oil supply such that only about half of liquids will come from these conventional sources
• Tight oil is also rich in Natural Gas Liquids (NGLs), so tight oil growth brings significant new supplies of NGLs
• Biofuels grow more than 70 percent with increasing demand for lower-carbon liquid fuels and technology advancements that reduce costs and land-use

• North America tight oil and associated NGLs production nearly doubles between 2017 and 2025. This significant growth swings North America to a net exporter of liquids
• After 2025, new deepwater supplies from Latin America and conventional crude from the Middle East grow to meet global demand
• The Middle East and Russia/Caspian will continue to invest in conventional oil production to maintain their role as leading exporters, at about two-thirds of their production in 2040
• Asia Pacific remains the largest and fastest growing region for liquids demand, and relies on increasing imports to supply the strong demand

Natural gas

Projections

Natural gas plays a vital role in satisfying the energy needs of consumers worldwide while helping to mitigate the risks of climate change.

Choosing natural gas as a cleaner-burning alternative to coal improves air quality and reduces carbon intensity.

Natural gas is abundant and versatile. It is a reliable and flexible fuel for electricity generation, a cleaner industrial fuel and convenient for home use. Natural gas grows more than any other energy source, rising from 23 percent of global energy supply in 2017 to 26 percent in 2040.

Natural gas resources are geographically and geologically diverse. North America’s unconventional gas resources are produced by applying horizontal drilling and hydraulic fracturing technologies. The Middle East and Africa are expected to tap large conventional natural gas resources. Natural gas production is expected to grow in every region except Europe.

Natural gas trade is a critical link between resource-rich regions and demand centers in Asia Pacific and Europe. New liquefied natural gas export projects are expected to diversify the market and meet 40 percent of the growth in natural gas demand to 2040.

• Natural gas is well-suited for homes, businesses and electric utilities seeking versatile, cleaner-burning energy
• Abundant and convenient, natural gas grows more than any other source of primary energy during the Outlook period
• Half of the growth in natural gas demand is for electricity generation and one-third is for industrial use 
• Residential users rely on natural gas for heating and cooking
• Increased penetration of natural gas-fueled buses and trucks can help urban areas manage air quality

• Natural gas rises in prominence as a cleaner burning alternative to coal over the Outlook period
• In China and Other AP non-OECD together, gas demand more than doubles from 2017 to 2040, but coal still plays a significant role in the region
• Coal demand doubles in Other AP non-OECD, partially offsetting major strides to reduce the use of coal in the OECD and China
• Outside of Asia Pacific, many developing countries are expected to leverage domestic natural gas supplies to meet rising electricity demand and fuel industrial growth

• In 2040, coal is expected to meet just 20 percent of global energy demand but produce more than 35 percent of energy-related CO2 emissions 
• With the same boiler efficiency, burning natural gas to produce heat emits about 40 percent less CO2 than burning coal
• Choosing flexible, highly efficient gas-fired electricity generation to replace older, inefficient coal plants can reduce CO2 emissions by up to 60 percent while also producing fewer air pollutants
• Every 1 percent of global primary energy shifted from coal to natural gas can reduce energy-related CO2 emissions by nearly 1 percent in 2040

• Rising global demand, competitive new projects in diverse locations and robust trade will shape future natural gas supplies
• North America’s abundant unconventional gas is expected to feed new LNG projects and meet growing local demand
• Africa’s natural gas production, demand and exports are poised to accelerate led by Mozambique, Nigeria and Egypt
• Russia/Caspian and the Middle East together are anticipated to retain more than half of inter-regional gas trade by further investing in export projects; both regions are well-positioned to expand pipeline exports in addition to LNG trade
• Europe is likely to increasingly rely on natural gas trade to meet consumer demand as local production declines
• In 2017, Asia Pacific’s natural gas imports rivaled Europe’s; by 2025, the region’s total natural gas demand will likely surpass North America’s; and in 2040, LNG trade is expected to meet nearly half of Asia Pacific’s natural gas demand

• In 2017, LNG trade met about 10 percent of global natural gas demand; by 2040, LNG trade will meet nearly 20 percent of the world’s natural gas needs
• Asia Pacific absorbs about 80 percent of the growth in LNG from 2017 to 2040, helping the region to reduce its carbon intensity while sustaining economic growth and improving lives
• China’s ‘war on smog’ and ‘blue-sky’ policies have led to measurable improvements in urban air quality while boosting demand for LNG imports
• India and other Asia Pacific importers are expected to look to LNG to supplement domestic natural gas production, often leveraging existing natural gas infrastructure
• Europe is expected to tap competitive LNG to diversify its natural gas import portfolio

• In 2017, 85 percent of LNG exports originated in Asia Pacific, the Middle East or Africa
• North America’s LNG exports are projected to grow the most as low-cost unconventional gas production prompts investment
• East Africa, Qatar and Russia projects are expected to expand and diversify LNG exports
• The LNG market is expected to remain highly competitive due to abundant natural gas resources and many aspiring exporters
• The diversity and reliability of LNG supplies - combined with the flexibility to ship it where it is needed - make LNG a favorable choice for nations needing dependable, lower emissions energy sources to foster economic growth

• Natural gas resource estimates keep rising as technology unlocks resources previously considered too difficult or costly to produce
• Less than 15 percent of recoverable natural gas resources have been produced
• Remaining natural gas resources can provide about 200 years of supply at current demand
• About 45 percent of remaining natural gas resources are from unconventional sources like shale gas, tight gas and coalbed methane
• Natural gas resources are geographically widespread